QUESTION 7 A sum of $1 million is available for investment. The chosen form of investment has averaged a return of 4 per cent per annum for the last 30 years. The current state of the national economy is stable and the government's target on inflation is to keep it below 3 per cent per year. Over the last decade the average inflation rate has been 2.6 per cent. On the assumptions that both the interest rate return on the investment and the inflation rate continue in line with their recent historical averages and the money is invested for the next seven years, what will be the real gain on the investment compared to the purchasing power of the money today? b 10.22 9.55 8.94 11.23